French Retail Giant Eyes Moscow

France's Carrefour, the second-largest retail outlet in the world after America's Wal-Mart, is once again setting its sights on Russia.

A Carrefour spokesperson said this week that the company, which suspended plans to enter the Russian market after the 1998 financial crisis, plans to open up a representative office in Moscow as early as this spring.

Industry sources said the retailer will be looking for suitable sites on which to build its hypermarkets in both Moscow and St. Petersburg and that the first would likely open in Moscow by the end of next year.

Although Carrefour has not yet entered into official talks with the administrations of either city, a Moscow region official said company representatives had already looked at sites on the Moscow Ring Road.

Carrefour's French rival Auchon has already chosen four sites on the outer ring to build its own supermarkets.

A top official in the St. Petersburg administration said Carrefour is considering being the anchor tenant in a new shopping/entertainment center being built in the southern part of the city.

Market participants said Carrefour's interest is another indicator of economic stability and positive changes in the country.

"Carrefour is famous for acting in absolute secrecy, and its appearance [on a new market] becomes known only when it opens a store," said Mikhail Panovko, spokesman for Russian retail chain Perekryostok. "At the same time, Carrefour is known for its efficiency, and it will force all other market participants to raise their service standards," he said.

"Westerners coming into the market will keep Russian companies on their toes and make them have to make stronger decisions and invest more into developing their retail networks," said Oleg Zherebtsov, director of Lenta Wholesale, a St. Petersburg firm currently building a cash-and-carry retail chain. "Otherwise, we will have a situation like in Poland, where you can hardly find local merchants anymore," he added.